Arthur Laffer Is So Full Of It -- Here's What Tax Cuts Really Do To The Economy

The Business Insider ^ | 6-7-2010 | Asha Bangalore, Northern Trust

[blam]

Arthur Laffer Is So Full Of It -- Here's What Tax Cuts Really Do To The Economy

Asha Bangalore, Northern Trust
Jun. 7, 2010, 9:20 PM

In the post below, Asha Bangalore of Northern Trust responds to Art Laffer's WSJ op-ed demanding more tax cuts. The title above, of course, is ours (Asha's far too professional and polite for a title like that). Asha's title is "Missing Elements" of Mr. Laffer's Incomplete Story.

Mr. Laffer illustrates his arguments about tax cuts and the positive impact on economic growth with the Reagan tax cut experience (see chart 1, replication of chart in Mr. Laffer's article) in today's Wall Street Journal (Arthur Laffer: Tax Hikes and the 2011 Economic Collapse - WSJ.com) and he predicts a dire economic situation if the Bush tax cuts are allowed to expire at the close of 2010.

Stepping forward from Laffer's utopic economic era, why did the economy post noticeable growth after tax increases were implemented in 1993? The recession ended in March 1991 and the banking system was beset with issues, which delayed the robust recovery until later. A revival of bank lending led to the self-sustained growth witnessed despite the tax increases instituted in 1993 by the Clinton administration. If Laffer's thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003? The evidence from tax cuts is essentially not as strong as Mr. Laffer's leads the reader to believe...

[snip]

[blam]

The article above is in response to this article written by Arthur Laffer in the Wall Street Journal:

Tax Hikes and the 2011 Economic Collapse

[blam]

"I’ll stick with Laffer here."

Me too.

[Last Dakotan]

If Laffer's thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003?

9/11 mean anything to these fools?

[null and void]

9/11? Whuzat?

[old curmudgeon]

Of course this is correct.

We should tax at 100% then everything would be perfect.

Just think how prosperous we would be.

[TheVitaminPress]

So we were all told that Bush was a buffoon for telling people to spend after 911 . . . when are we going to be told by the MSM that Obama is a fool for -in light of the spill in the gulf- telling people to go to the beach

[usconservative]

tepping forward from Laffer's utopic economic era, why did the economy post noticeable growth after tax increases were implemented in 1993?

Two words: WELFARE REFORM. The biggest cuts in Government Spending in the last 50 years occurred because of WELFARE REFORM, this has been well documented.

This is what happens when you ask someone who barely speaks f'ing english (Asha Bangalore) to analyze the American economy and our economic models. This guy's a moron.

[Frantzie]

Northern Trust actually employs this idiot? They actually are a well managed company but they are HQ’ed in.... Chicago.

[usconservative]

If Laffer's thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003?

September 11th, 2001. That's why. Asha, you're a complete moron.

[STONEWALLS]

I’m a 14th generation white American capitalist...I don’t take instruction from an Indian....on economics, or anything else.

[stboz]

If Laffer's thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003?

Uh, could it be that the Democrats and RINOs spent all the new revenue and then borrowed more?

[MediaMole]

Northern Trust does a great job with my folk’s money, but they do have a vested interest in high taxes, since high taxes mean that people need help structuring their assets to minimize taxes.

[Man50D]

Mr. Laffer ignores the history of the income tax. People were taxed merely 1% on the first $20,000 of income and 7% on income over $500,000 when the 16th Amendment was passed in 1913. Less than 1% of the population earned more than $500,000 in 1913. Consequently at least 99% were taxed only 1%. That minute tax rate has mushroomed into the burdensome tax rates we have today. Clearly history has proven any tax cuts under the income tax will simply revert back to the oppressive tax burdens we've had in the past and maybe higher. A tax cut is a short term solution

The long term solution is to scrap the income tax code by replacing with The Fair Tax Act(HR25/S296) that will replace all federal income taxes with a national sales tax(not a VAT)and abolish the IRS. Fair Tax ping!

[shempy]

This response to Laffer is weak. She fails to take into account the economic impact of 9/11, not to mention the simultaneous fighting of two wars.

But hey, 2011 isn't that far away, so we shall see.

[genxer]

The 1993 tax cut came just at the start of the computer revolution. The economy grew despite it because there was a whole new sector added to the economy.

Remove the tech boom and bubba would of been a one term bust.

[griswold3]

Obama told people to go to the beach??!!
What’s he trying to do, kill us??

[Bryan24]

“If Laffer’s thesis about tax cuts is valid, why did the U.S. economy record the weakest period of economic expansion following the Bush tax cuts of 2001 and 2003?”

1. The BILLIONS of dollars of cost associated with the attacks of 9/11.

2. A 2 front war in the middle east.

3. Hurricane Katrina (and Ivin and several others in the early 2000s that devestated the Gulf Coast).

4. Doubling of oil prices.

5. Bailout of the banking scoundrels.

6. Being overun by illegal aliens.

Need I go on?

[Frantzie]

Correct. One of the few trust companies that has good returns. Bessemer Trust is another.

[Lurker]

since high taxes mean that people need help structuring their assets to minimize taxes.

DING DING DING! No more calls folks, we have a winner.